THE METHOD(S) USED FOR GATHERING THE INFORMATION

“Business Research Methods” – is a “descriptive research,” which seeks to determine and describe the answers to the research objectives – identified to understand the competitiveness of Afghan marble industry. In light of the objectives set for the research, a method was designed for the information collection. The research design is the master plan specifying the methods and procedures for collecting and analyzing the needed information there are four basic research methods for a descriptive type of research: surveys, experiments, secondary data studies ,and observation.” Each of these methods can be determined and used based on the nature of the research objectives, availability of data sources, the urgency of the decision, and the cost of obtaining the data. For the purpose of this research, the author used surveys, secondary data studies, and observation as the methods for data collection. “The most common method of generating primary data is through surveys By AISA orgonization Although it has been suggested that surveys are conducted to quantify certain factual information, certain aspects of surveys may also be qualitative. This usually involve structured interviews for individuals and groups, questionnaires, and so forth that help in collection of data that would be used for “measuring variables and verifying existing theories or hypotheses or questioning them, which is often used to generate new hypothesis based on the results of data collected about different variables.” Qualitative aspects of surveys “involve a phenomenological perspective where by researchers aim to understand; report and evaluate the meaning of events for people in particular situations, that is, how their social world is structured by the participants in it.” (Research Methodologies Defined, 2007) The focus is on how the participants – rather than the researcher – interpret their experiences and construct reality. To do the surveys, the author conducted personal interviews, telephone interviews, group interviews, designed questionnaires, and carried out site visits as well as direct observations. Overall, the research has been built based on real-world information available with the relevant players on the ground for the marble industry. Information was collected through both primary and secondary sources of materials. The extent of use of primary research information versus secondary materials – throughout the paper – differs depending on the nature of each objective. For example: In Objective number one, “to understand the current literature on the Afghan marble industry,” the author chose to use a lot of secondary information. Generally this part of the research was performed on the basis of data available in the governmental and nongovernmental entities, e.g., the Ministry of Mines and Industries (MMI), the Afghan Geological Survey (AGS), Office of the representative of the U.S. Geological Survey (USGS), Afghanistan Marble and Granit Processors Association (AMGPA), and Afghanistan Investment Support Agency (AISA).

These data included geological survey reports conducted during 80s together by the

Afghan and Russian experts, e.g. “Geo-structure report of Kabul region that was

conducted in 1982.” Other data that was used for this research was the “Minerals Law of Afghanistan” and “Partnership Law of Afghanistan.”

The research also included a series of reports and studies that were recently conducted by USGS, the U.S. Agency for International Development (USAID), and the OTF Group. These included the Preliminary Non-fuel Mineral Resource Assessment of Afghanistan; Mines and Mineral Occurrences of Afghanistan; Natural-Color Image Mosaics of Afghanistan: Digital Database and Maps; Preliminary Mineral Resource Assessment of Selected Mineral Deposit Types in Afghanistan; Enterprise Development Project in Central Asia report; the OTF Group’s Afghanistan Competitiveness Project key document library and several other small reports. Many technical articles as well as data in terms of market trends; facts and figures including prices of marble blocks and tiles – worldwide –

were downloaded from a number of websites. Some of the very useful articles include but are not limited to the “Quality Management Practices in Dimensional Stones: A Reference to Marble Stones Processing” (Gyani, Lunia, & Pareek, 2003); “Innovation in Quarry Front (GALLI) Cutting Technology” (Wahy & Jha, 2003); and several others. Data from Afghanistan Investment Support Agency included “Afghanistan Investment Opportunities with Regional Significance;” report on “the Market Prospects” and the “Sector Overview on Mining, Power and Water.”

In objective number two, “to investigate current approaches to the Afghan marble

productivity,” a mix of both – the primary and secondary information – was used. The primary information was collected by conducting interviews, while the secondary information was collected from the above mentioned secondary sources.

The interviews were conducted with the people, who were – in one way or the other – involved in the value chain, e.g., presidents of several plants/factories, quarrymen,

laborers, etc. The interviewees included Deputy Minister of Mines and Industries,

Director of Mines, Director of Afghan Geological Survey, Head of Minerals Department of the Ministry, Director of Extraction Departments, four geological Engineers, Director of the Afghanistan Marble and Granite Processors Association, five Chief Executive Officers (CEOs) of Processing Plants, ten quarrymen, and several laborers at five processing plants in Kabul city. Questions for the interviews were arranged in a way that covered areas of expertise for each particular interviewee i.e., the deputy minister was asked questions at the policy and strategy levels. In general, three sets of questions were developed covering policy/strategy level, operational level, and customer level, which included the market information as well. Strategy and policy level questions were more to the attention of the senior officials of the government. The questions explored a) the position of the government regarding the natural resources especially the marble; b) their current role and involvement throughout the value chain in marble production; c) their thinking and initiatives on how they could further develop the industry; d) what they have done so far to facilitate foreign direct investment as well as domestic investment in the industry; e) their initiatives towards privatization and strengthening the private sector; f) what they have done to make the afghan marble more competitive; and g) what is their formula in setting the royalty fee for the quarries of marble across the country. Additionally, other questions that kept arising throughout the interviews were also asked to further clarify the issues. Operational level questions were developed for the attention of the personnel of the processing plants and marble companies. These questions explored the overall development chain of marble production from quarrying all the way to the processing and distribution of marble tiles to the market. Particularly the questions included a) what the people in the processing plants were thinking about the afghan marble quality; b) what approaches they were using to quarry the stones from the mountains; c) what they thought about the requirements and procedures imposed by the government; d) what their thoughts were regarding the main barriers against development of marble in the country;

c) why afghan marble was illegally exported to Pakistan; d) what was their technological limitations in terms of machineries for the industry; and e) what were their suggestions for the government to further develop the industry. Additionally, questionnaire was developed and distributed to each company to fill out for recoding the volume of production for the years 2003 through 2012. Customer level information was limited to the whole sellers and retailer shops that were selling marble tiles to the construction companies, individuals, and other consumers.

Questions to collect the market information in terms of prices and types of marble tiles available in the market – from other countries – were developed in the form of a separate questionnaire and distributed to ten retailer and whole seller shops to record the marble prices in the domestic market.

The information that became available throughout the interviews were carefully noted down and recorded on papers and notepads that were subsequently filed to be used for the purpose of the research. Similarly, site visits were carried out that included direct observations from the quarry sites, the processing plants, retailer shops and exhibitions, and wholesalers stocks. Observations included detailed process of blasting at Gazak quarry in Kabul and Khogiany quarry in Nangarhar provinces. Additionally, observations included visits of tiles production process at the five leading processing plants in Kabul Province. The author also photographed certain parts of the process, e.g., blasting, loading, unloading, processing, sawing, polishing, finishing, and distributing to the market.

Objective number three was “to analyze the Afghan marble competitiveness,” using the Michael Porter diamond analysis model, which is discussed in details in the next topic

THE METHOD(S) USED FOR ANALYZING THE INFORMATION:

For the purpose of this research, the author chose to work with “Michael Porter’s Model of Competitiveness” to analyze the information. Porter’s “Diamond Analysis” and the “Five Forces” models were selected because these models provide an outstanding framework that explores and illustrates very comprehensively the various angles of competitiveness in the industry. Using the Porter’s model, based on the information available, the National Diamond – the four broad attributes, e.g. the factor conditions, the demand conditions, the related and supporting industries, and the firm strategy, structure, and rivalry in a nation that individually and as a system constitute the national advantage of a nation – is illustrated. Each of the four determinants is discussed in relation to the marble industry in sufficient details. Consequently, the marble industry Cluster Diamond and Cluster Map are developed, which provide illustrative information to the reader. The Diamond diagram and the Cluster Map have also been accompanied with narratives that further analyze the industry. Following the National Diamond, Cluster Diamond, and the Cluster Map, the industry has been analyzed in accordance with Porter’s ‘Five Forces,’ e.g. the suppliers force, the buyers force, the new entrants force, the substitute products

force, and the rivalry force among the existing firms. Each of the five forces has been analyzed separately in regard to the Afghan marble industry. Based on all these analyses conclusions have been drawn and recommendations made.

Overview of Porter’s Diamond Analysis: Michael Porter of Harvard University offers a model that can help understand the national competitiveness of a country and its comparative position in the global economy. He argues that the national competitiveness of a nation does not rely on the factors that many believe at. It is not a macroeconomic phenomenon driven by variables such as exchange rates, interest rates, and government deficits. Neither it is a function of cheap and abundant labor, nor is it connected to the bountiful natural resources of a territory. He believes that “the only meaningful concept of competitiveness at the national level is ‘productivity.’ The principle goal of a nation is to produce a high and rising standard of living for its citizens. The ability to do so depends on the productivity with which a nation’s labor and capital are employed.” “A nation’s standard of living depends on the capacity of its companies to achieve high levels of productivity and to increase productivity over time. Sustained productivity growth requires that an economy continually upgrade itself.” (Porter, 1998) Porter adds that “no nation can be competitive in everything. The idea is to deploy the nation’s limited pool of human and other resources into the most productive uses. Even those nations with the highest standards of living have many industries in which local companies are uncompetitive.” For a country to be competitive then the question is to find out “determinants of productivity and the rate of productivity growth” and more importantly finding the particular fields/industries that the country’s success in productivity is related. Porter has identified four attributes that individually and as a system determine and constitute the diamond of national advantage for a country. These attributes are:

- Factor conditions: the nation’s position in factors of production, such as skilled labor or infrastructure, necessary to compete in a given industry;

- Demand conditions: the nature of home-market demand for the industry’s product or service;

- Related and supporting industries: the presence or absence in the nation of supplier

industries and other related industries that are internationally competitive;

- Firm strategy, structure, and rivalry: the conditions in the nation governing how

companies are created organized and managed, as well as the nature of domestic rivalry.

Furthermore, Porter introduces the concept of ‘Clusters’ that helps to illustrate a particular industry and its links with all the other relevant and interconnected industries on the ground. “Clusters are geographic concentrations of interconnected companies, specialized suppliers, service providers, firms in related industries, and associated institutions in particular fields that compete but also cooperate” (Porter, 1998). Clusters are very helpful in understanding an industry and then the ‘Diamond’ for a cluster is even more helpful to understand the determinants of productivity in a particular cluster. Porter also introduced a framework that models an industry as being influenced by five forces. The model is called the “Porter’s Five Forces Model.” These forces are the power of suppliers, the power of buyers, the power of new entrants, the power of substitute products, and the power of rivalry amongst the existing players. Analysis of all these forces along with the cluster and the national Diamond gives a very comprehensive understanding and illustration of any industry in a particular geographic territory. The subsequent sections in this chapter analyze Afghanistan’s marble industry cluster competitiveness based on these models.

THE ANALYSIS:

Afghanistan National Diamond:

Country economic overview: As put by Michael Porter, raising the standard of living of the citizens in a country is the principle goal of any government. Afghanistan’s standard of living is amongst the lowest in the world. “The human development index (HDI) for Afghanistan has a value of 0.345. It remains far behind neighboring countries with a rank of 174 out of 178 countries on global HDI (a composite indicator that measures education, longevity, and economic performance)” (CPHD, 2007). Afghanistan has a gross domestic product (GDP) of $35 billion. With an estimated GDP per capita of $3353 and $1000 adjusted for purchasing power parity or “PPP,” Afghanistan remains the poorest country in the region. Exhibit number two illustrates Afghanistan’s economic performance in compare with its neighboring countries. Economic growth trend is declining as it is not an unusual phenomenon in any post-conflict economy.

Afghanistan central bank report .

The declining trend is mainly because the country started recovering the economy from scratch in 2002 with infusion of international assistance at once. The gap is being filled year by year and the trend is taking its real position as time goes.

Date: 2015-01-29; view: 763